If you don't like the weather, wait five minutes. That old saw should be the operating rule on the financial marketplace, given how frequently and abruptly trends have tended to change in recent times.

Markets are now in the midst of another dramatic climatic shift with all the gloom of 2011 making way for blue-sky projections. In a near statistical miracle, the worst performing countries, sectors and stocks are at the top of the league tables this year.

It is no coincidence that Hungary, Egypt, India, Turkey and Greece are the five best performing markets so far this year; exactly these markets were at the bottom the heap in 2011. If the bears are now feeling out of place they just need to wait it out; the odds are that conditions will switch back to their liking later in 2012.

That indeed has been the nature of post-bubble markets. A study done by a former colleague, Tuen Daraaisma, in which he looked at the 19 major secular bear phases of the past century, shows that after a bubble bursts, markets follow a standard pattern.

They decline on average by nearly 60%, typically over a 30-month period before rebounding sharply in the following year and then spend the subsequent five to six years violently moving within a trading range as wide as 50% - all part of the healing process.

This finding dovetails with a recent paper that suggests it takes around nine years for an economy to return to its pre-crisis trend-line growth rate following a financial shock.

Professors David Papell and Ruxandra Prodan at the University of Houston in their paper titled, The statistical behavior of GDP after financial crises and severe recessions, say households, corporations and financial institutions need that amount of time to significantly reduce their debt overload.

In contrast, after garden-variety recessions where there is no structural problem, it has taken the US economy just 18 months to revert to its trend growth rate.

The good news is that growth is faster in the second half of that nine-year span than in the first, because the legacy problems become smaller and are resolved more quickly.

The US has certainly worked off some of the excesses with the inventory of unsold newly built homes now at a 50-year low. A report published last month by the McKinsey Global Institute on the process of debt and deleveraging shows the US is indeed deleveraging at a faster pace relative to most developed countries and is maybe one-third to half through its deleveraging cycle.

As a share of the economy, debt in the US financial sector has fallen back to 2000 levels and the corporate sector is generating record free cash flow with its debt ratios at a 20-year low.

Households have cut their debt-to-disposable income ratio by 15 percentage points and McKinsey estimates that at this rate, US households could reach sustainable debt levels in two years.

But as the McKinsey report points out, many other critical factors led to other crises-ridden economies such as Sweden and Finland successfully emerging from their financial slump in the 1990s.

In this regard, the US needs to soon put in place a credible fiscal sustainability plan as it began the crisis running large fiscal deficits that have only gotten worse with time; Sweden on the other hand was at least running a budget surplus when crisis hit while Japan let its government debt soar and did not even recognise the problem of non-performing loans in its corporate sector, thereby allowing the wounds to fester and its economy to stagnate.

Both Sweden and Finland also enacted structural reforms (the most sweeping move was to join the European Union) that allowed their nations to attract foreign investment.

Until the deleveraging process in the private sector is over and the government checks the deterioration in its fiscal situation, the burden of debt is still likely to weigh on US and global economic prospects despite all the improvements taking place in the private economy. This in turn is likely to keep markets oscillating in a wide trading range along with the ebbs and flows in economic momentum.

The question now is how far can the current positive momentum take the US and global markets before the weather turns for the worse again? The key here may well lie with commodity prices, particularly oil. One of the most underestimated factors behind the relapse in the global marketplace last year was the surge in oil prices.

Following talk of another round of quantitative easing by the US Federal Reserve in the summer of 2010, oil prices surged by more than 50% in the ensuing six months. Such a sharp move in oil has historically always led to a major economic slowdown and that's exactly what happened in 2011, even before the onset of the European financial crisis.